Sats and DHL sign MOU to create offerings for airlines to better manage supply chain

Sats and DHL said the memorandum of understanding combines their strengths.

SINGAPORE - Airport and food services provider Sats has joined forces with logistics giant DHL to offer carriers like Singapore Airlines (SIA) new ways to better manage food and other resources.

The initiative will deliver costs savings for airlines while giving travellers more choice of in-flight meals and a greater array of amenities such as duty-free goods, among other benefits, the firms said.

They will be focusing on the airline market in India, Singapore, Thailand and Vietnam.

Sats, Changi Airport's biggest ground handler, and DHL said the memorandum of understanding combines their strengths: "The comprehensive ... solution spans demand planning, menu customisation and planning, to supply chain consultancy and reverse logistics."

Reverse logistics involves moving goods from where they are consumed back to their point of origin for reuse or disposal.

The firms added: "With end-to-end visibility, airlines will be able to achieve higher consistency, better inventory management, reduced waste and greater customer insights."

They also said the tie-up will remove the need for airlines to seek out different providers for different services.

Being able to better predict demand means airlines will not have to hang on to inventory unnecessarily, which in turn reduces storage and warehouse costs.

DHL will contribute to the partnership through its expertise in areas such using data analytics to estimate demand and in generating revenue from food waste while Sats brings its experience in large-scale catering and ground handling.

Sats executive vice president for food solutions Kerry Mok said on Friday (Sept 13): "Our partnership with DHL extends our global reach through reliable third-party logistics, allowing us to partner with airlines across their entire flight network".

The firm recently reported that first-quarter net profit fell 14.4 per cent to $54.7 million from the same period a year earlier due to the weaker global economy.

It had received a boost in March when its ground handling contract with SIA was renewed for another five years with an option to extend for a further five years.

The new contract includes in-flight catering, passenger and cargo handling, aircraft interior cleaning, aviation security and laundry services.

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